By on January 28, 2016

Matthias Müller

Refuting a report that many Volkswagen managers were involved with a widespread cheating scandal involving 11 million cars worldwide, at least three different regional offices and hundreds of employees, the automaker’s top brass has other ideas.

“No one has spoken with me,” Volkswagen’s CEO Matthis Müller told reporters on Thursday according to Reuters. “You got the information from some sources who have no idea about the whole matter.”

Set us straight then, Müller. Tell us how hundreds of confiscated hard drives and terabytes of data from multiple offices — those are VW’s figures, not ours — and more than 380 interviewed employees contradict a report that a department was scared shitless to raise their hands and admit failure to higher ups? Because that case is shaping up quite nicely.

Will you tell us now?

“Is it really so difficult to accept that we are obliged by stock market law to submit a report to the AGM on April 21 and that it is not possible for us to say anything beforehand?” the CEO asked, according to Reuters.

Oh.

Actually, yes. That’s difficult to accept.

Especially because Volkswagen stockholders and local officials have pressed the automaker into moving more quickly, which has cost the company billions in lost value. Especially because by the time Volkswagen presents its own report, it’ll have been nearly two years since the ICCT notified the automaker that its emissions were suspect.

It’s difficult to accept that after repeated gaffes and delays, Volkswagen wouldn’t be more forthcoming — even after the company admitted being more open would be necessary to move on.

Even still, it’s difficult to accept that Müller still has a job.

[Image: Volkswagen]

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48 Comments on “Volkswagen Execs Have Lost the Plot...”


  • avatar
    JimZ

    ““Is it really so difficult to accept that we are obliged by stock market law to submit a report to the AGM on April 21 and that it is not possible for us to say anything beforehand?” the CEO asked, according to Reuters.

    Oh.

    Actually, yes. That’s difficult to accept.”

    I don’t know the ins and outs of German securities/financial law, but the SEC in the US does define “quiet periods” where public companies cannot announce anything which would materially affect its share value.

    • 0 avatar
      sirwired

      Given that the date he’s clinging to like a life-preserver is three months out, I’m pretty sure that it’s not any German “quiet period” law holding him back. If it was a couple weeks, I could buy that, but it’s not.

      And in the US, the “Quiet Period” rules affect companies holding an stock offering, not established companies in the ordinary course of business, who can speak about anything they damn well please. (And even IF VW were subject to “quiet period” rules, they would not rule out issuing such a report. Basically, you can’t pump up hype about your company coming into an offering, but the likelihood that this report would be considered any such thing is pretty low.)

  • avatar
    28-Cars-Later

    VAG must be a bit like Hollywood.

    “In Hollywood you just kind of fail upwards”

    -Kevin Smith

  • avatar

    VW clearly has zero public relations assets at this point in the game. Its painfully clear to see that.

    • 0 avatar

      Who is VW’s PR counsel? Jeb! Bush?

    • 0 avatar
      jpolicke

      VW’s public demeanor has gone from humbly apologetic when the story first broke to arrogantly defiant. Muller is basically saying “You’ll get your answers when we’re good and goddam ready, so fork off.” Which is like the guy cursing and spitting at the camera while he’s being perp-walked into the station to be booked: not a great way to build sympathy.

    • 0 avatar
      APaGttH

      They will be using this as a teaching example in business, marketing, and communication courses for decades.

      Their lack of ability to manage this crisis is utterly stunning for such a large corporation. You would think that head counsel would have come in by this point and said, “it’s time to just STFU.”

    • 0 avatar
      Big Al from Oz

      Flybrian,
      I think VAG, the institution and execs consider themselves above the law.

      The execs at the top have run into a problem, VAG doesn’t have the resources, ie tools and instruments within VAG to placate the situation.

      They are running scared. The execs are in a position where they can’t massage the truth with omission of knowledge, using “stand over” tactics on lower levels of management, etc.

      I expect VAG execs to wear the larger proportion of accountabiity than the lower levels of management.

      I somehow don’t think the German government, auto workers, etc will accept this to be white washed.

      Heads and big heads will roll. But, again there will be those who are protected.

  • avatar
    manny_c44

    The tone of this article is absurd. How can Aaron Cole still pretend to be offended by VW so far after the fact? That’s a question more interesting than the ones posed in the article.

    • 0 avatar
      brettc

      Maybe he owns a VW? I own one and every time Mueller opens his mouth lately I end up more annoyed at his/VW’s ineptitude.

      He needs to STFU and actually fix this problem and not keep arguing that they did nothing wrong. Mueller is seemingly greasier than a Clinton could ever hope to be.

      • 0 avatar
        ctowne

        but didn’t you hear him the last time he went in front of a microphone? “he didn’t understand the question”! and every subsequent question. and that one too. oh look! a squirrell!

    • 0 avatar
      RobertRyan

      Agreed about Aaron. Everywhere else in the world the VW saga is almost on the back page

      • 0 avatar
        Big Al from Oz

        RobertRyan,
        I do believe the US is pushing this quite far. At the end of the day VW did overly bend regulations in a deceptive fashion, not only to the consumer, but to national regulating authorities.

        This is significant enough to warrant an in depth inquiry into some of the self regulation that occurs.

        Look at the GFC. How many Wall St types ended up in prison? They fncked up to a greater extent than VAG. Millions, billions of people were affect by Wall St.

        You want self regulation, self assessing, etc with little auditing then you will end up with a situation like we have.

        In the end the biggest group to blame are the regulating authorities (governments) for the lack of compliance by the manufacturers.

  • avatar
    Pch101

    “Is it really so difficult to accept that we are obliged by stock market law to submit a report to the AGM on April 21 and that it is not possible for us to say anything beforehand?” the CEO asked, according to Reuters.

    Oh.

    Actually, yes. That’s difficult to accept.
    _____

    So you’re not interested in knowing whether Mueller is correct?

    If you could prove him wrong, then you would have a compelling argument and one that would deserve to go viral within automotive circles.

    Freaking out without confirmation, not so much. If you are willing to base an opinion on, well, nothing…

    • 0 avatar
      RideHeight

      I can go to our snowplow guy for a more nuanced understanding.

    • 0 avatar
      tedward

      Pch

      Thank you for saying it. I thought I was reading a gawker column once I got past the headline. This is potentially a story if a German securities expert can support your disbelief. Without that opinion it’s just an emotional reaction from the bully pulpit.

      It’s interesting that Mueller keeps getting into these situations. It leaves me with the impression that he’s not a man used to being questioned. Contrast that with horn.

      • 0 avatar
        Pch101

        I think that you’re blaming Mueller for circumstances that he didn’t create.

        Here the basic differences between the US and EU situations:

        -Discussions with US authorities have been ongoing for some time and have already been resolved vis-a-vis VW’s admissions of guilt. The EU investigations are more recent and VW is currently still saying “nein.”

        -Euro 5 standards were less stringent than the EPA limits, so it may be possible to legitimately argue that there was either no wrongdoing and/or the solutions for the EU are easier/cheaper

        -On the other hand, the size of a problem in the EU is considerably larger than the US, given that VAG has about 20% market share in Europe and has sold a considerable number of diesels there. So it is in VW’s best interests to negotiate hard with the EU and deny-deny-deny because even a fix that is cheaper on a per-unit basis could still be a budget buster due to the scale.

        The BBC had a test performed by a Czech facility that found that the cars managed to comply with Euro 5 NOx (but well above US EPA levels) in the lab but then produced results well above Euro 5 when the car’s emissions software was fooled into thinking that there was no test. If accurate, then that’s a pretty damning result for VAG, as it would suggest that it did attempt to also fool the EU and not just the US. That would mean that there was a defeat device as defined by the EU directive, which would be illegal.

  • avatar
    Master Baiter

    Why must I be visually assaulted by the same Nazi’s mug every friggin’ day?
    .
    .

    • 0 avatar
      TonyJZX

      That’s a bit rough. I do admit he looks a bit like a Bond Villan.

      I believe they feel that they have reached a point where they couldnt lose any more so being VAG, the #2, sometimes #1 global manufacturer of some luxury brands, they’re going to go deep in the defiance… I mean you expect them to bow and curtsey like the Japanese?

  • avatar
    jpolicke

    So I guess that means no remedies will be announced or performed until April 21 at the earliest. That ought to tickle the EPA.

  • avatar
    Lou_BC

    Bueller?… Bueller?… Bueller? oh sorry meant to say:

    Müller?……………….Müller?……………………Müller?

    Anyone?………………..Anyone?…………………Anyone?

  • avatar
    wmba

    Yep, read this Muller tripe this morning on Reuters.

    VW has gone from being apologetic in September to yelling at everyone to get off their lawn, go home and leave them alone.

    With the German KBA (equivalent of NHTSA and EPA all in one) in their back pocket okaying fixes like a home-made flow-straightener and a quick hack for all the affected cars in the EU, VW seems perplexed that anyone could still be upset.

    Talk about living a life of privilege.

    • 0 avatar
      Pch101

      You should consider the possibility that it is much tougher to comply with the EPA standard of 50 mg per mile than it is to meet the Euro 5 standard of 180 mg per km, or about 290 mg per mile.

      I suspect that what VW can’t say openly is that the software was programmed to fool the EPA, but the software ended up in other cars. That was illegal in the US, but it may not have had a material effect on Euro 5 results, as those cars were allowed to produce almost six times more NOx than the US-spec cars.

      Accordingly, VW may be able to argue that there were no “defeat devices” under EU guidelines because the cars were clean enough, regardless. That argument won’t fly in the US.

      • 0 avatar
        Varezhka

        @Pch101, from what I understand, the VW diesel sold in Europe had a separate programming for detecting NEDC test cycle, so it wasn’t simply a case of EPA cheat software finding its way into Euro vehicles.

        What VW has been arguing all this time is that the cheat software (which detects the NEDC cycle and runs emission control only during this test) does not go against the letter of the law (even if it completely misses the intent of the law), at least in Europe.

        Now Müller is saying that not only is the software not technically illegal, he an everyone else he cares about had no idea this was done. That anyone who claim otherwise are all liars.

        • 0 avatar
          Pch101

          As far as I can tell, VW has not claimed to have fitted an EU-specific software package. It has denied that the software that was fitted was a defeat device. VW has admitted to having installed software in the cars and that the cars received type approval as a result, which isn’t quite the same thing as admitting that it cheated.

          But defeat devices aren’t legal in the EU, either. If the software did alter the emissions results, then I’m not sure how VW is going to be able to ultimately defend its position.

  • avatar
    Varezhka

    @Pch101, from what I understand, the VW diesel sold in Europe had a separate programming for detecting NEDC test cycle, so it wasn’t simply a case of EPA cheat software finding its way into Euro vehicles.

    What VW has been arguing all this time is that the cheat software (which detects the NEDC cycle and runs emission control only during this test) does not go against the letter of the law (even if it completely misses the spirit of the law), at least in Europe.

    • 0 avatar
      wmba

      Exactly. The Euro “normal” diesel tune was for the NEDC cycle, and that’s how they start up from cold. Actual real world driving was designated abnormal, and the computer ran a lax tune to preserve the life of the lean NOx trap. Trust VW to designate the test cycle “normal”. Up is down and left is right in their Alice in Wonderland world.

      The EU laws pertain to test results, so VW’s defense is that their cars met the test. Since the laws do not apparently explicitly state that the test result must reflect running on an actual highway, VW is taking the con-man’s defence that they didn’t actually break the law. And now, they are arguing that “how could it be done otherwise?” because who knows how Joe Everyman drives.

      Peculiar that the Leeds University roadside testing shows that gasoline/petrol engines meet the EU limits then. Perhaps gas engine human drivers have amazingly consistent control inputs that diesel engine drivers are incapable of replicating due to the immense passion driving a diesel vehicle engenders.

      It’s a load of poor excuses from VW from top to bottom.

  • avatar
    NickS

    From the beginning it was curious that VW came out and admitted it was cheating in the US (granted they were dragged to it kicking and screaming). You confess when you want to put this behind you asap. And there is a playbook for it: you quickly do a recall, wide as you can or as warranted, and use that to brown nose your regulators when you negotiate the fine.

    Why admit to the wrong-doing if you are going to do the opposite of what the playbook says? If they think that can rewrite the playbook that is some serious hubris.

    Was the admission authorized from the very top of VW? Even if it was, did they have a legal strategy in place beforehand?

    We can’t know if the source SZ used for this story is 100% correct, but Muller questioning its veracity is a huge risk. It is very much reminiscent of the denial they served up to the regulators for a whole year about the discrepancies.

    I seems they are trying to walk back on that early admission by challenging any accusations now. I don’t quite understand how this type of legal strategy would benefit VW. Financially it could be ruinous. Perhaps protecting the old guard is all that really matters, so they really need to make the story of “a few rogue engineers” true no matter the risk.

    IDK, the PR sucks, the crisis management sucks, and the legal strategy is late to the party.

    • 0 avatar
      Pch101

      There is a big difference between 50 mg and 290 mg.

      Why would you presume that a car that can’t meet US standards couldn’t comply with EU standards when the latter were much lower?

      • 0 avatar
        NickS

        The difference between the two emissions standards was a relevant point in a previous article but it’s not what we are talking about here.

        • 0 avatar
          Pch101

          Question: A guy is driving 81 mph on a road. Is it illegal?

          Answer: It depends upon where he is.

          Of course, the differences between the laws are relevant. VW certainly seems to be hanging its hat on its interpretation (or misinterpretation) of those differences.

    • 0 avatar
      Luke42

      I’m beginning to think that nobody realizes that leadership positions include the responsibility to provide adult supervision for the company.

      Seriously, he’s defending himself on the basis that nobody took him aside to tell him there’s a problem? What exactly does he think an executive is supposed to do all day, if not keep the crazy train on the rails?! That’s a rhetorical question, of course, but he does need to ask himself why he gets paid more than a spokesmodel.

      • 0 avatar
        NickS

        @luke
        It is crazy that he considers this a defence, but there you have it. Muller’s job is to make the “handful of rogue engineers” theory stick and the negotiations with them are not going well. They are leaking to the press to get income security in exchange for silence. Muller will be gone as soon as fingers start pointing towards the old guard.

        “No one came to me” is another way of saying that he is not engaged with the people whose leaks could cost him his job. If he still doesn’t know who they are I really feel sorry for him.

  • avatar
    seth1065

    Well to be fair here , I am sure Muller would be just as happy being back at Porsche , he was tapped, pushed, bribed into taking the top spot at VW, he is in damage control and doing a lousy job of it here in the NA market, it would be interesting to see how the Germans think he is doing, lets be honest here , NA is not a big deal in the VW empire and he has to make sure he contains the damage here. I am sure someone at VW is saying GM killed people and the US gov is going soft on them, we bent the rules on a test that is not fair and they want to drag us thru the mud.

  • avatar
    astrocortex

    The real question is what future does my 2012 Touareg TDI have?

    • 0 avatar
      Luke42

      Considering that its a Volkswagen, it’s likely to be a future of expensive repairs…

      At least that’s what owning an out-of-warranty VW was like for me!

      • 0 avatar
        LeeK

        Oh for crying out loud, Luke. You had ONE VW which you bought used, and it wasn’t very reliable. That car was manufactured 15 years ago and yet you continue to repeat the same old tired meme about Volkswagens blowing up out of warranty. I’ve pointed out several times to you that aggregate statistics from True Delta, Consumer Reports, and even J.D. Powers show VW reliability to have risen to industry average levels. In Consmer Reports alone, long term reliability for VW is now 12 out 28.

        Give it a rest, why don’t you?

        • 0 avatar
          DenverMike

          VWs may be just as reliable as Chryslers say, but also consider the cost of repairs, which are up there with BMW/Mercedes/Audi and sometimes Porsche. Why take the gamble for a non-luxury, no prestige car?

          Then add ‘diesel’ into the equation????

          • 0 avatar
            LeeK

            A Touareg IS a Cayenne/Audi Q7 except it has a VW badge on it. It’s made on the same exact manufacturing line in Slovakia as the more prestigious brand variants. I think of Touareg owners as savvy car buyers, getting luxury brand performance and convenience for tens of thousands less. Reliability is equivalent.

          • 0 avatar
            DenverMike

            That’s fine when Touareg owners get to enjoy hidden luxury and prestige along with Audi/Porsche maintenance and expensive repairs, but what’s in it for Jetta/Passat/Beetle/etc owners, getting saddled with the same high maintenance and high repair bills of luxury/prestige German cars, without the benefit of luxury/prestige?

          • 0 avatar
            astrocortex

            Well, I didn’t ask the question about the other cars. Just the Touareg. Reason why I ask is because there is so little talk about the 6cyl TDI.

            I’ve now owned 5 VW dating all the way back to 1995 (my parents had the original rabbit in the best green and brown combo ever) and while our 2002 golf tdi was a miserable failure(used, from a honda dealer… duh), all the rest have been absolutely perfect. My wife’s unitronic chipped GTi has had some funky stuff happen at inconvenient times, but fouled sensors are expected on such german OCD vehicles. You’d think if something was going to be expensive and break a lot, it would be the chipped gti. Nope.

            I’ve also yet to have an expensive run-in with the shop. Most I’ve ever spent was on one of the big scheduled maintenances and 4 new tires all at once.

            However, a dealer experience I had about 2 years ago where THEY broke my truck had soiled me on VW before the whole emissions debacle. The thing is, I didn’t buy it for the environment. I got it because I wanted a black treg and I wanted a tow vehicle. That’s not VW’s fault, just a local f&^* with no soul.

          • 0 avatar
            LeeK

            Astro, you’ll probably get a software flash and you’ll be on your way. You’ll also get the VW $1000 Good Will package as well. As for resale value, it’s unclear what will happen in the near term or the long term. If you keep your Treg for a few more years, the effects will most likely be difficult to solely attribute to the fact that you have a diesel VW. These are still pretty highly regarded vehicles amongst enthusiasts.

            DM, you’re asking a bigger question about the worth of German vehicles over domestic or Japanese manufacturers. That I can’t answer that for you because it’s been debated endlessly in this and other automotive forums without any conclusion. People buy what they like and what fits their perceived needs. It may be hard to believe, but there is a small percentage of US buyers who think VWs match their needs the best.

            I’ve owned two dozen vehicles over the past three decades — from domestics to Japanese to German makes. Other than an E90 BMW I had for a while, I haven’t found repair bills to be all that different when done through independent garages. The parts for German cars are a little more expensive, but not outrageously so. I’ve also owned a number of VWs and Hondas in that mix and having laid out $4000 in the past year for repairs to an Element, I can safely say the three Hondas I currently own have cost me way more than any VW I’ve ever owned.

          • 0 avatar
            astrocortex

            I can’t see how they could lower the emissions without having noticeable effects to the performance. Diesel is diesel and air is air, right? Messing with that chemistry is going to change performance, isn’t it?

            Luckily I bought this vehicle knowing it was going to be driven into the ground, so value isn’t really an issue for me right now. If they do somehow destroy everything I love about the Touareg with a software fix, surely unitronic or other tuning companies will just reverse it. I hope.

          • 0 avatar
            LeeK

            The thing is, nobody knows yet what the software flash’s effect will have on performance. The good news is that you already have an AdBlue system integrated in your SUV so it’s a matter of tweaking the parameters a bit to reduce emissions. Will that lower your overall fuel mileage? Probably, but I predict only a few percent. Will that reduce power? Again, probably yes but only in certain conditions that you may not even notice in everyday driving.

            I’ve been keeping up with the Touareg forums quite regularly (my wife drives one) and there is a bunch of speculation but no hard facts yet. It may be many months before anything is offered up by VW and you may have the option of not having the flash done at all. It depends on your state’s emissions control policies and whether your SUV is tested as a requirement for license renewal. When I lived in the east, I had to get my cars tested every year. Here in the southwest, there is no such test, ever.

  • avatar
    tailgate1234

    Herr Schultz, he knows nothink.

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